Why Customer Analytics is Crucial to Success

Customer and Marketing Analytics allow you to figure out the marketplace dynamics, understand and dialogue with your customer, and design and execute your next strategy.What is CRM Analytics? While some may call it the "360 degree view of a customer," at the end of the day it means gathering and analyzing data on customer attributes, transactions, interactions and experiences.

The widespread use of ERP and CRM systems means that more and more sales, marketing, and industry data is becoming available to companies. It is then becoming essential to maximize the value of this information by having the right applications in place. Organizations that put visually interactive analytics applications into the hands of sales and marketing professionals stand to gain a significant advantage over the competition.

Business analytics applications are responsive to changing circumstances, allow companies to rapidly aggregate critical data without IT involvement, and can be applied to forward-looking decisions. Marketers are no longer limited to understanding what already happened--they can now focus on what's happening and how to take immediate action by answering questions such as the following:

Does this prospective customer, though in a different segment, share the profile of my most profitable customer? What makes my products succeed? What are the market trends, and do they suggest that I should leave a product category? I know this promotion works, but does it work in this market? How can I re-focus my sales team to capture more market share in a changing market?

Wouldn't every marketer want to know the answers to such questions? The data is most likely there to support this decisioneering, and three types of analytical capabilities can be applied in the pursuit:

Campaign management applications with built-in segmentation and campaign management tools that allow you to dialogue with your customer on a regular basis, whether it's through direct mail, email or the web.

Business intelligence applications that allow you to understand what's happening out in the marketplace and get reports out to all of the operating managers, so they can make better decisions.

Data mining applications that allow you to go in and mine the information so that you can figure out what your next strategy ought to be or how your tactics ought to evolve over time.

The limitations really are no longer technological, but rather process and ownership related.

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4 Comments

Vlad, I totally agree. At my last job at a private equity firm, a big part of our diligence process involved customer analytics for the dual purposes of finding leading indicators of financial performance and discovering ways for our portfolio companies to further optimize their performance.

In fact the business with which I'm now involved focuses on customer analytics as a key part of the BI equation.

It's the old adage... if you can't measure, you can't manage. But, why stop with only external analytics? The same benefits an organization derives from customer analysis, can be attained with internal "customers," as well. Visualization tools, process automation and data mining applied to sales forces and service teams will vastly improve overall productivity and ROI of your human assets (employees).

2. Remember that your goal is total customer growth- This means that while you’re adding new customers, be sure not to lose the ones you already have.

3. Dramatize the Differences- At some point you must take customers from your competitors. You’ve got to be better, you’ve got to be different, you’ve got offer something they don’t have. Unless your competitors really stink their customers won’t become your without a compelling reason.

An appropriate CRM system includes a combination of the above strategies and many other strategies which make your business unique.

I've worked with a couple of CRM systems in my company and have take test - drives of a few others. In my opinion many of tend to make things more complex when you want to find some thing about your customer. For example, finding a list of prospects across a particular domain in a geographical region seems like a simple metric but it requires hopps to go through in the CRM tool. Ofcourse, once you get the grips of CRM and analytics, you could get nuggest of useful info.

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